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Winning the lottery is the ultimate dream for us all and the answer to all of our financial problems. And while sustaining a healthy financial lifestyle is going to be difficult after you win that jackpot, it should be a priority because it is never fun to find yourself bankrupt after winning the lottery. Establishing a smart financial plan should be your first step after you collect your winnings. However, if you are not sure where to start, here we have a list of tips that can help you spend your money wisely after you win the lottery:
1. Pay off your debts and taxes
Usually people do not think about the taxes they will get while waiting for their US Powerball or Singapore Pools Results, all they care about is winning. When you win a big sum of money from the lottery, the first thing you need to do before indulging in your newfound wealth is to pay your old debts and new lottery-related taxes. That will give you peace of mind as well as the financial freedom you need to invest and spend your money in the right places.
2. Invest your winnings
To ensure that your winnings grow, you need to invest them. Of course, you do not need to invest them all, you are allowed to indulge yourself here and there, you have won the lottery for God’s sake. However, you need to set aside a portion of the winnings to invest them so that your money does not run out, which will lead to you ending up where you started. It is important to invest in what you understand after consulting professionals.
3. Always create a budget
Winning the lottery does not mean that you have to give up on your saving habits. Start creating budgets before things get out of hand. Budgets are your trusted friends. Create them, follow them and review them. Budgets will help you keep track of your spendings and understand your financial situations better. They are the key to saving and establishing a financial stability. Write down your earnings, then start writing your upcoming expenses, starting with taxes, mortgage, utilities and insurance. The rest of the money can be divided between savings and other things you need.
4. Control bad shopping habits
Although retail therapy is one of the best remedies after a long stressful day, it is not always the best decision; on the contrary, most people end up regretting their purchases and stressing over the money they spent. After you win the lottery, you will feel that you can buy everything and even if that is true, it does not have to be so. You should only go shopping if you plan to buy something and it is better to wait for it to go on sale. Also, try to shop alone because shopping with friends can lead you to buying things impulsively without thinking it through.
5. Plan your shopping trips
Going shopping without a plan will surely result in you spending your winnings in the wrong places. Always plan your shopping trips beforehand and write down a list of all your needs. You should browse the stores and check the different prices of the products you need first, then decide which items fit your budget and needs. You can buy them knowing that you have made the best choices.
6. Only buy using cash
Using credit or debit cards can lead you to spend more money than you actually have, which is why you should only pay using cash. Paying with cash will consciously feel like you are spending your money, while paying with cards does not feel as real. Also, only buy things you know you can pay for fully because debit and interest are never fun. They will only add to your anxiety concerning your finances.
7. Never buy what you do not need
One of the biggest problems of our times is consumerism. We are always driven by the society and commercials to buy products or services that we do not need. Stay conscious, focused and understand where and why you are spending your winnings. Before you make any unplanned purchase check your bank statement, then ask yourself if you will really use this item, if it will add value to your life and if it will make you happy. If you do not answer “yes” to these questions, do not buy it.